Vestis Launches Comprehensive Strategic Transformation Following Reporting of Fiscal 2025 Results
Vestis Corporation, a leading provider of uniforms and workplace supplies, today announced its financial performance for the fiscal fourth quarter and full-year periods ended October 3, 2025. The results coincided with the significant launch of a multi-year Strategic Business Transformation Plan designed to enhance efficiency, profitability, and customer focus. Both the fourth quarter and full-year reporting periods included an additional week of operations compared to the prior fiscal year.
Key Financial Highlights: Q4 and Full-Year 2025
The fourth quarter saw Revenue of $712 million, reflecting a 4.1% increase year-over-year. However, the increase was primarily due to the extra operating week, which contributed $51.6 million. Excluding this factor, revenue declined 3.5%, mainly due to a net loss of rental business and decreased direct sales.
Despite the revenue lift from the extra week, the company reported a Net Loss of $13 million, or $\$(0.10)$ per diluted share, in Q4 2025, compared to an Operating Income of $29.8 million in the prior year’s fourth quarter. The year-over-year operating income drop to $17.6 million was largely attributed to margin contraction from lost business, partially offset by better selling, general, and administrative (SG&A) cost controls.
Key Q4 2025 Metrics:
- Revenue: $712 million
- Operating Income: $18 million
- Net Loss: $13 million
- Adjusted EBITDA*: $65 million
- Free Cash Flow*: $16 million
The company maintained solid available liquidity of $298 million as of October 3, 2025, including $30 million in cash and cash equivalents. Total outstanding debt stood at $1.34 billion.
Management Vision: Anchoring Future Growth
President and CEO Jim Barber expressed confidence in the company’s trajectory, stating, “We ended fiscal 2025 in a good position to advance our strategic priorities as we enter fiscal 2026.” He highlighted that a recent comprehensive review of the commercial strategy and operations led to the identification of necessary actions to strengthen performance, unlock operating leverage, and improve customer service.
This assessment culminated in the formal launch of the transformation plan, which Mr. Barber expects to progressively yield improvements throughout fiscal 2026 as the multi-year process advances.
Executive Vice President and CFO Kelly Janzen emphasized the immediate financial objective: “Our near-term focus is increasing both profitability and cash flow to lay the foundation for stronger, more durable financial performance going forward.” The comprehensive value-creation plan is anticipated to be a critical driver for improving operating leverage, strengthening the balance sheet, and ultimately delivering lasting value for all stakeholders. The CFO projects the plan will generate substantial annual operating cost savings of at least $75 million by the end of fiscal 2026, alongside efforts to enhance revenue growth.
Strategic Business Transformation Plan: Three Pillars
The multi-year transformational restructuring plan was developed in collaboration with third-party advisors and is designed to create a more customer-focused, agile, and efficient Vestis platform positioned for long-term profitable growth. The Plan is expected to be substantially complete by the end of fiscal 2027, with estimated execution costs between $25 million and $30 million.
The strategic plan is structured around three core pillars:
- Commercial Excellence: Focused on enhancing customer retention, penetration, and profitability. Initiatives under this pillar include improved market segmentation, strategic pricing adjustments, expanded product offerings, and disciplined commercial execution.
- Operational Excellence: Aims to boost efficiency, scalability, and cost-effectiveness by standardizing operations across all facilities. This also involves streamlining the organizational structure, aligning resources with strategic goals, and modernizing core business processes and systems.
- Asset & Network Optimization: Designed to improve logistics and asset utilization. This will be achieved through strategic network rationalization, effective equipment reallocation, and targeted capital investments in property and equipment.
These priorities provide a clear, disciplined framework for both near-term performance improvement and long-term value creation through continuous improvement and a relentless commitment to serving customers.
Fiscal Year 2026 Outlook and Capital Position
Looking ahead, Vestis provided its financial outlook for fiscal year 2026:
- Revenue: Expected to be flat to down 2% compared to normalized fiscal 2025 revenue.
- Adjusted EBITDA*: Projected in the range of $285 million to $315 million.
- Free Cash Flow*: Anticipated to be between $50 million to $60 million.
The company’s capital allocation during Q4 2025 included an investment of $15.4 million in property and equipment, largely directed toward improvements in market center facilities. The focus remains on leveraging capital to support the strategic transformation and drive future returns.Adjusted Net Income, Adjusted EBITDA, and Free Cash Flow are non-GAAP financial measures. Investors are encouraged to review the company’s full filing for reconciliation to GAAP measures.
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